Having it Both Ways: How Charter Schools Try to Obtain Funding of Public Schools and the Autonomy of Private Schools

• Citation: Vol. 63 No. 2
• Publication year: 2013

Having It Both Ways: How Charter Schools Try to Obtain Funding of Public Schools and the Autonomy of Private Schools

Preston C. Green III

Bruce D. Baker

Joseph O. Oluwole

HAVING IT BOTH WAYS: HOW CHARTER SCHOOLS TRY TO OBTAIN FUNDING OF PUBLIC SCHOOLS AND THE AUTONOMY OF PRIVATE SCHOOLS

Preston C. Green III^* Bruce D. Baker^** Joseph O. Oluwole^***

Introduction

Since 1992, forty-two states and the District of Columbia have enacted legislation for charter schools.¹ As of December 2011, there were 5,700 charter schools educating 1.9 million students.² Charter schools are characterized as public schools that receive autonomy from a variety of rules and regulations that traditional public schools must follow.³ In exchange for this increased autonomy, charter schools are accountable to the requirements that are established in the charter.⁴ Failure to satisfy those requirements could result in the closing of the school.⁵

Charter schools and "traditional public schools" are similar in that they are directly subsidized by a combination of primarily state and local taxes based on their enrollments.⁶ However, the authorization process for these two types of schools can be quite different. Local education agencies (LEAs), which are usually school districts that are governed by elected school boards, decide to

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open new traditional public schools.⁷ While LEAs may open new charter schools in many states, some state statutes grant chartering authority to nonprofit private entities that are governed by boards of directors consisting of private citizens.⁸ Traditional public schools and charter schools may also differ in terms of how they are governed. While LEAs generally govern traditional public schools, many states permit private boards of directors to operate charter schools.⁹ Another key difference between traditional public schools and charter schools is that charter school governing boards might choose to contract a private entity, or educational management organization (EMO), to manage and operate the school.¹⁰

This Article discusses how charter schools have used their hybrid characteristics to obtain the benefits of public funding while circumventing state and federal rights and protections for employees and students that apply to traditional public schools. The first Part explains how charter schools have emphasized their "public" characteristics to withstand state constitutional challenges that they are ineligible for public funding because they are private schools or fall outside of a system of public schools.

The second and third Parts of this Article explain how charter schools have emphasized their private characteristics to avoid having to comply with state and federal protections that protect employees and students. Specifically, the second Part discusses how privately run charter school boards and EMOs have evaded state union election laws by arguing that they are private entities that are covered by the National Labor Relations Act (NLRA), a federal statute that governs private-sector employment. The third Part discusses how charter schools have attempted to evade federal constitutional and statutory protections for employees and students by arguing that they are not state actors pursuant to 42 U.S.C. § 1983, a federal statute that establishes a cause of action for deprivations of federal constitutional and statutory rights under the color of

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state law.¹¹ These Parts also point out that attempts to circumvent state and federal protections for students and employees may have unintended consequences, such as inviting federal involvement in charter school labor policies, or causing state courts to revisit the question of whether charter schools are public schools eligible for funding under state constitutional law.

I. Charter Schools, Public School Funding, and State Constitutions

Plaintiffs have alleged that the private characteristics possessed by charter schools render them ineligible for funding under state constitutions. Charter schools have survived these challenges by convincing courts that they are sufficiently public to be eligible for funding. This section discusses how charter schools have withstood challenges under two types of constitutional provisions based on their private characteristics: (1) state constitutional provisions that prohibit funding to these types of schools and (2) state constitutional provisions requiring the state to provide a uniform or efficient system of public schools.

A. Category #1: Are Charter Schools Too Privately Governed to Be Eligible for Funding?

Courts in Michigan and California have examined whether the private characteristics of charter schools make them private schools that are ineligible for public funding. These decisions are significant because sixteen charter school states have similar constitutional provisions. Seven charter school states have constitutional provisions barring the funding of private schools with public funds: Alaska,¹² Arizona,¹³ Hawaii,¹⁴ Michigan,¹⁵ New Mexico,¹⁶ South

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Carolina,¹⁷ and Wyoming.¹⁸ Seven states with charter schools have constitutional provisions limiting educational funds to public, free, or common schools: Connecticut,¹⁹ Georgia,²⁰ Missouri,²¹ New Jersey,²² Rhode Island,²³ Texas,²⁴ and Washington.²⁵ Two states with charter schools have constitutional provisions that prohibit the funding of any schools that are not under the exclusive control of the state: California²⁶ and Massachusetts.²⁷

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In Council of Organizations & Others for Education About Parochiaid v. Engler,²⁸ the Supreme Court of Michigan found that the state's charter school statute did not violate article VIII, section 2 of its constitution, which provides, "No public monies or property shall be appropriated or paid or any public credit utilized . . . directly or indirectly to aid or maintain any private, denominational or other nonpublic, pre-elementary, elementary, or secondary school."²⁹ The plaintiffs alleged that charter schools violated section 2 "because they were not under the immediate and exclusive control of the state."³⁰ The Michigan Supreme Court found that this constitutional provision did not require the state to exercise exclusive control.³¹ However, the court acknowledged that other states had recognized the need to exercise some control in order for a school to qualify for funding.³² Charter schools satisfied this requirement "because they are under the ultimate and immediate control of the state and its agents."³³ First, the authorizing body could revoke a charter when it had a reasonable ground for revocation, such as the school's failure to comply with the terms of its charter or with all applicable law.³⁴ Second, authorizing bodies, which were public institutions, exercised control over charter schools through the application approval process.³⁵ Third, the state set the qualifications for determining whether charter schools were eligible for funding.³⁶ Finally, other sections of the school code applied to charter schools.³⁷

The Michigan Supreme Court rejected the argument that charter schools were unconstitutionally funded private schools because they were not under the control of the qualified voters of the school district. The court observed that

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the Corpus Juris Secundum had defined public schools as, "broadly speaking, open and public to all in the locality, which the state undertakes through various boards and officers to direct, manage, and control, and which is subject to and under the control of the qualified voters of the school district in which it is situate[d]."³⁸ The Parochiaid court also noted that the Washington Supreme Court, in State ex rel. School District No. 3 v. Preston, had defined a common school as "common to all children of proper age and capacity, free, and subject to and under the control of the qualified voters of the district."³⁹ However, the Michigan court found that article VIII, section 2 did not require public schools to be under the control of the voters of the school district, but rather that they be under the control of the state legislature, which was under the command of the state electorate.⁴⁰

The plaintiffs also alleged that charter schools were not public schools because private boards of directors ran them, and the authorizing bodies had no means for selecting board members.⁴¹ The court rejected this argument because the power "granted by the Constitution to the Legislature to establish a . . . primary school system carried with it the authority to prescribe what officers should be chosen to conduct the affairs of the school districts, to define their powers and duties, . . . and how and by whom they should be chosen."⁴² The legislature exercised control by empowering the authorizing body to establish "the method of selection, length of term, and number of members of the board of directors of each [charter school] subject to its jurisdiction."⁴³ The court further pointed out that the authorizing bodies were publicly elected or appointed by public bodies.⁴⁴ While the charter school boards of directors may not have been elected, the public maintained control over charter schools through the authorizing bodies.⁴⁵

In Wilson v. State Board of Education, a California appellate court found that charter schools did not violate article IX, section 8 of the state constitution, which provides, "'No public money shall ever be appropriated for the support of any sectarian or denominational school, or any school not under the

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exclusive control of the officers of the public schools . . . .'"⁴⁶ First, the court found that the exclusive control requirement was met because the legislature had declared that charters were under the control of the legislature and directed the courts "to construe the law liberally to effectuate that finding."⁴⁷ Second, charter schools were not in opposition to the public schools, but were instead a part of the system.⁴⁸...